Economic Dynamic Modelling of Climate Policy in Poland

Olga Kiuila and Lewczuk Emilia
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Lewczuk Emilia: University of Warsaw, Poland

Central European Economic Journal, 2021, vol. 8, issue 55, 246-255

Abstract: Poland is responsible for 9% of CO2 emission in the European Union (EU), making it the fifth biggest emitter in the region. The energy sector is dominated by electricity produced from coal (around 70%). The country currently uses massive subsidies to boost the coal sector. We propose a dynamic intertemporal hybrid general equilibrium model to simulate the economic effects of sector regulations and new policy targets within environmental taxation scenarios, by accounting for a complex set of linkages between the energy sector and other components of the economy. Our simulation results suggest that positive economic growth is possible with a realistic energy mix, but it will not offer considerable emission reduction, as required by the European Commission. In the short-time horizon, the best choice is renewable energy sources indicated by less capital-intensive technologies (such as biomass). In the long-time horizon, more capital-intensive technologies (such as wind turbines) will be a better choice for economic growth. Carbon tax plays a crucial role in optimal energy mix targets, since its elimination ceteris paribus implies negative economic growth.

Keywords: computable general equilibrium modelling; decarbonization; energy technologies (search for similar items in EconPapers)
JEL-codes: C68 D58 Q43 Q58 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ceuecj:v:8:y:2021:i:55:p:246-255:n:8

DOI: 10.2478/ceej-2021-0018

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